LONDON (Bloomberg) — Bermuda-based Frontline Ltd., the world's largest operator of supertankers, posted a 92 percent slump in fourth-quarter profit and predicted improving earnings, with freight rates bolstered by the global economic recovery.

Net income fell to $3.9 million, or five cents a share, from $51.6 million, or 66 cents a share, a year earlier, Frontline said in a statement on Friday. The company was expected to post profit of $11.3 million, according to the median estimate in a Bloomberg survey of 15 analysts. Operating revenue dropped to $262.1 million from $451.5 million.

Tanker rates averaged 48.38 Worldscale points in the fourth quarter, 43 percent less than a year earlier, as oil demand weakened. The International Energy Agency raised its forecast for 2010 global oil consumption this month and the World Bank increased its estimate for world economic growth last month.

"A faster global recovery and the projected increase in world oil consumption are likely to lead to increased transportation needs and are positive for the demand in the tanker industry," Frontline said in the statement.

Frontline said it would pay a dividend of 25 cents a share. That's better than expected, Arctic Securities ASA said in a report.